Shames sues UCAN for libel

Michael Shames, who departed the Utility Consumers’ Action Network last year amid a federal investigation and internal charges of keeping secret bank accounts and accepting unauthorized bonuses, is now suing the nonprofit for libel.

Shames, who ran the ratepayer advocacy group for nearly three decades, filed the suit late last month against UCAN and its staff attorney, David Peffer.

“Plaintiff’s reputation was harmed by the release of personal and unauthorized information and defendants’ conduct was a substantial factor in causing plaintiff’s harm,” the complaint states.

In addition to libel, the lawsuit accuses UCAN and Peffer of wrongful termination, malicious prosecution, unauthorized computer use and access, conspiracy, invasion of privacy, breach of contract and other misdeeds.

Shames said in the suit that UCAN wrongly leaked information to the media and damaged his reputation, even as he worked to establish San Diego Consumers’ Action Network — a new group to advocate for ratepayers of San Diego Gas & Electric and other companies.

“Beginning in June 2012, UCAN began a systematic process of defamining plaintiff with the objective of undermining his ability to complete the SDG&E rate cases or conduct any other advocacy on behalf of SDG&E customers before the Public Utilities Commission,” the suit states.

The complaint also claims UCAN improperly accused Shames of conspiring with class-action lawyers to generate lawsuits that might eventually lead to payments to Shames.

The suit is the latest in a long-running saga involving UCAN, which began in the early 1980s as community group to fight rate hikes requested by SDG&E and other utilities. The group receives substantial funding from intervernor fees and other proceeds of its consumer actions.

In recent months, the organization has been through six different executives and seen a variety of people join and resign from the board of directors.

Donald Kelly, the Northern California lawyer who took over as UCAN executive director late last year, declined to comment on the suit.

UCAN has confronted a number of problems since 2011, when Peffer and co-worker Charles Langley approached the board of directors with concerns about Shames’ management practices.

Peffer and Langley claimed that Shames controlled UCAN bank accounts with misspelled names like Utility Comsumers’ Action Network, collected hundreds of thousands of dollars in bonuses without disclosing the payments on UCAN tax filings, accepted a $1 million donation to produce a film about China trade practices and was an inactive bar member for years while representing himself as a lawyer.

Shames denied doing anything improper and said an independent review of the charges provided no evidence of wrongdoing.

The Watchdog reported in November that $2 million UCAN received from a class-action settlement was supposed to stay in California for educational purposes, but instead $1 million was invested in an out-of-state hedge fund. The paper also reported in August that UCAN requested Shames return $474,000 in bonuses that were never approved by the board.

Both reports are cited in the lawsuit as examples of UCAN undermining Shames.

Former San Diego City Attorney Michael Aguirre, who represents Peffer, said he would vigorously defend his client. He also said the lawsuit would allow the truth to come out in court.

“Rather than being sued, this young man (Peffer) should be given an award for having the courage of his convictions,” Aguirre said.

The lawsuit seeks punitive and other damages, although no specific amount of money is requested.

It also seeks 10 percent of a recent $50,239 payment UCAN received from SDG&E -- money Shames says he is due under the bonus program.